An egg supplier has backed away from a spokesman's claim that an animal cruelty video was "staged" by an animal rights group.

McDonald's and Target dropped Sparboe Farms as an egg supplier this week after the activist group Mercy For Animals released the disturbing video showing what it says is animal cruelty at the company's farms in Hudson, Iowa and Minnesota. Sparboe also operates a Fort Lupton farm where young hens, or pullets, are raised until they're old enough to move to the egg-laying farm in Hudson.

On Sunday, Ken Klippen, Sparboe Farms executive director of government relations and animal welfare, told 7NEWS the video was staged by workers allied with Mercy For Animals who had infiltrated the farms.

Late Monday afternoon, another Sparboe Farms spokesman, Chuck Sanger, said Klippen's comments were his personal opinion -- not the company's.

"It's not the official position of the company that it was staged," Sanger said. "We don't have evidence to suggest that it was staged."

Mercy For Animals Executive Direct Nathan Runkle called the staging claim a lie and demanded that Sparboe issue a retraction.

"They're losing customers left and right because this cruelty has been exposed," Runkle said. "Now they're resorting to just outright lies."

Runkle said none of the Sparboe workers shown in the video are associated with the animal rights group.

The video was taken with a hidden camera by one Mercy For Animals investigator, Runkle said. The investigator took a job on a Sparboe Farms bird-moving crew that allowed him to travel among the company's facilities.

The undercover video shows hens crammed in crowded cages, a worker swinging a chicken around on a wire and another worker trying to shove a bird inside the pocket of a co-worker, apparently for fun. Another worker presses his thumb against the back of a chick's neck until it breaks.

"That was a staged video," Klippen told 7NEWS Sunday night, adding that Sparboe was set up by employees on a mission to destroy the company.

"So, you're saying point-blank they came into your company and they did these acts and they videotaped them to take you guys down?" 7NEWS reporter Amanda Kost asked the company spokesman on Sunday night.

"Correct. Point-blank," Klippen replied.

Sparboe Farms President Beth Sparboe Schnell wrote on the website, "We have identified four employees who were complicit in this disturbing activity and they have been terminated. Management changes have taken place, and our investigation is ongoing."

"I was deeply saddened to see the (animal cruelty video) story because this isnt who Sparboe Farms is," Schnell wrote. "Acts depicted in the footage are totally unacceptable and completely at odds with our values as egg farmers. In fact, they are in direct violation of our animal care code of conduct, which all of our employees read, sign and follow each day."

Runkle said an extended undercover video shows supervisors and managers standing by while many of the cruelty incidents are taking place.

Klippen, however, claimed the video is part of Mercy For Animals' campaign to get consumers to eliminate meat, milk and eggs from their diet.

Mercy For Animals website encourages people to "go vegan." Vegans do not eat meat, fish, poultry, eggs, dairy products and honey. They also don't use animal by-products such as leather, fur, silk, wool, cosmetics, and soaps derived from animal products, according to the Vegetarian Resource Group website.

The Mercy For Animals website touts a 2009 campaign to get BOCA Foods, a major producer of meat substitute products, to remove eggs from its product line.

"Over 99% of cruelty to animals in the United States occurs at the hands of the meat, dairy, and egg industries, which confine, mutilate, and slaughter over 9 billion animals each year," the group's website says. "As such, MFA primarily focuses on farmed animal advocacy and promoting cruelty-free food choice."

Mercy For Animals said its key demand is that large egg producers like Sparboe Farms stop housing hens in so-called battery cages. Each cage holds five to seven chickens and the cages are stacked on racks, four tiers deep, Runkle said.

"They can't spread their wings. They can't walk," Runkle said of the hens. "Quite frankly, it would be illegal to keep dogs and cats in this way."

"The entire European Union has banned these battery cages because they're inherently cruel," he said. California and Michigan are requiring farms to phase out the cages.

Giant retailers, including Whole Foods Market, Wolfgang Puck and Hellmann's Mayonnaise, have also moved to cage-free eggs, Runkle said.

Sparboe Farms, one of the nation's largest egg producers, promotes its Animal Care Code of Conduct on its website. The firm's "essential freedoms" provided to laying hens, include "freedom from pain, injury or disease," sufficient space and proper facilities and "freedom from fear and distress by ensuring that conditions and treatment allow hens to avoid mental suffering."

Runkle said Sparboe is making false and misleading claims about its animal care and Mercy For Animals plans to file a complaint with the Federal Trade Commission.

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